Is bad credit preventing you from getting a loan? People with good credit have easier time when borrowing money from traditional banks. Unfortunately, bad credit plagues most small business owners due to a financial crisis that occurred several years ago. Even a small business with a stellar rating will find it harder to borrow from a bank.
Funding is available for women with startup business ideas, but it is not easy to get. Most financing options are in the form of loans, which are mostly unattainable for people with bad credit. Still, plenty of funding options are available for a woman who wants to start her own business. If you can prove that you have the right experience to run a business, you will definitely get small business loans for women with bad credit.
Depending on your startup idea, a peer-to-peer loan can be a great option for you. However, they work best for women who need a small amount of money, preferably less than 10,000 dollars, to start their businesses. In this P2P lending system, you make a request by telling others about your business idea and the qualifications you have to run it.
Individual investors will review your story and give you a fraction of the money with a certain interest rate. If you have bad credit, you present a higher risk, which means that the rates of interest will be higher. P2P lending is also a good way of soliciting funds from family and friends.
They can give you the money that you require and earn an interest, but you will not need to go through the hassle of paying them back directly. You can do all this through an intermediary website.
Venture capital and angel investors
When you need more capital to start your business, you should think about looking for venture capitalists and angel investors. These companies or individuals will provide you with the necessary funds, but they keep control of a percentage of profits and your company. The companies do not care about your personal credit score.
These investors mostly focus on your potential to run the business, your business plan, and the experience that your co-workers have. Venture capitalists and angel investors usually look for businesses in the field of technology that have the potential to make big profits in future. This means that they might not be very helpful for small, one-woman businesses.
Grants and loans for women
Women, who want to start their own businesses, can get grants. However, they are few and far-between and the competition to get them is very fierce. They usually originate from nonprofit organizations.
Grants are usually earmarked for disadvantaged women that reside in low-income areas. To make sure that you get the grants, you need to hire a professional grant writer who can write your proposal. However, you should remember that getting a loan with bad credit is never easy.
Because the government backs SBA loans, you should consider talking to a lending company that provides them; you never know, they might give you a chance. Your best chance, however, would be to speak to an organization that specializes in giving loans to women who own businesses. Such companies would be willing to give you a chance even if you have bad credit.
In this male dominated world, it is not easy for a woman to make a name for herself. It is even harder for a woman with bad credit to get her startup off the ground. The good news is that there are alternative funding programs that give business owners an opportunity.